Stressing Over Money? Here’s How to Stop

Money is the main cause of anxiety in the U.S., psychologists say. These seven moves will help you take control of your cash – and quit tearing your hair out.

Worried about your finances? You’re not alone. Money was the top stressor for the average U.S. resident in 2016, according to a survey by the American Psychological Association.

The other top stressors are work (58 percent) and the economy (50 percent). All three are connected:

  • If you don’t have enough money, you stress over it.
  • If you don’t have a job, or if your job doesn’t pay enough, you stress over it.
  • If the economy worsens even in small ways — say, if gas prices or tax rates rise — then you really stress over it.

Obviously you can’t do much about the economic system. You might not be able to do much about your current work situation, either, if jobs are scarce in your region or if your employer can’t afford to give raises.

Here’s what you can do something about: the way you use the money you currently have.

Sometimes we think we don’t have enough, and sometimes we’re right about that. But maybe you just don’t have a true handle on your finances. The following seven tactics will help you get control of your cash — and quit stressing.

1. Follow the money

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According to the National Financial Capability Study by the FINRA Investor Education Foundation, 18 percent of U.S. residents spent more than their income in 2015 — and not on big-ticket items like new cars or houses. The survey of more than 25,000 U.S. adults for the study found 21 percent had past-due medical bills.

Do you have ever-increasing credit card balances and calls from collections agents? Super stressful! Fortunately, you can take steps to pull yourself out of the hole.

Step 1: Track your spending. Use pen and paper or an app like PowerWallet. At the end of the month you might be startled to see how much money leaked away on impulse purchases or, yes, those doggoned lattes.

Step 2: Make a budget. It doesn’t have to hurt! Try the 50/30/20 budget: No more than half of your after-tax income going toward “must-haves,” 30 percent for “wants,” and 20 percent for savings and debt repayment. Thus you would put basics like rent and utilities under “must-haves,” whereas concert tickets and weekend getaways would go under “wants.”

(These categories are somewhat flexible, though. If paying down consumer debt faster or putting more in retirement is a priority for you, then shoot some of your “wants” dollars over toward those goals.)

Step 3: Hack your spending. Every dollar you don’t spend is a dollar that can be sent toward the future. See these Money Talks News articles for money-saving tactics:

Step 4: Don’t try to do it all at once. Would you do a 100-mile ride the first week you owned your bicycle? Of course not. Gradually incorporate money-saving ideas into your lifestyle. Aim for one per week or per month, depending on how complicated the hack. Packing a lunch is pretty simple, whereas shopping around for the best rates on your mortgage rate, credit card, insurance and savings-account rates takes some doing. (Pro tip: Check out our Money Makeover, where we’ve put links to all those things.)

Once you know what you earn and how you spend it each month, it’s time for another potentially scary revelation …

2. Know what you owe

Marijus Auruskevicius /

Make a list or a spreadsheet of every debt you have: student loans, mortgage, car payment, credit card balances, child support, whatever. Add up the minimum monthly payments (make sure you’re sitting down when you do this), and you’ll have a clear idea of what has to go out each month.

Now compare that number to what comes in each month. Best-case scenario: You can make your monthly nut.

Worst-case scenario: You can’t. But this is fixable. Get out your calculator and proceed to …

3. Set attainable money goals

Dream big, set goals, take action.Elizaveta Galitckaia /

First, see about contributing to a 401(k), a Roth IRA or some other retirement vehicle. The best time to have done so was 10 years ago. The second-best time is right now.

Maybe you think it’s smarter to pay off the balances on your credit cards first, given their bruisingly high interest rates. But you can’t finance your retirement! If you’re lucky enough to have an employer match, aim to contribute as much as you’re allowed (even if you have to start small).

No such benefit at your workplace? Read some Money Talks News articles on retirement saving options, and get going. Automate at least some money each month into one of these funds, even if you have to start small.

About that credit card debt: Rather than making minimum monthly payments (and stressing out over the ever-increasing balance), make a specific plan to pay it off. If you’re one of the lucky ones who brings in more than you currently spend, send some of the surplus toward your card balances.

Some consumers swear by the “debt snowball” method, which means paying off the card with the lowest balance first even if it also has the lowest percentage rate. The theory is that slaying the first debt dragon quickly gives you the incentive to keep going.

If you’re the kind of person who truly needs that push, proceed with the snowball. A smarter way, however, is the “debt avalanche,” in which you pay as much as you can on the card with the highest interest rate, and make minimum payments on all other cards. When the card with the highest interest rate gets paid off, you focus on one with the next-highest interest rate, and continue to make minimum payments on the others. And so on.

Some people utilize the balance transfer method: Get a zero-percent interest credit card and transfer all your debt there, then work like mad to pay it all off. Look for the best zero-percent interest card deals here.

Need a little guidance with your goals? Visit the National Foundation for Credit Counseling or the Financial Counseling Association of America to see about some one-on-one counseling. You’ll pay for this based on what you owe, which means you may not have to pay at all.

(Note: Check any credit counseling organization through the Better Business Bureau and your state’s attorney general’s office.)

And if all this money management stresses you out? Remember to …

4. Celebrate every victory /

Make a monthly money date with yourself (and your spouse or partner, if you have one) to look clearly at your funds. Look at all signs of progress:

  • “My consumer debt is 15 percent lower than when I started a few months ago. If I keep going at this rate, I’ll be debt-free within one year.”
  • “My Roth IRA has $1,100 in it — woo hoo! This time last year I didn’t even have a Roth IRA!”
  • “Only three more car payments and the vehicle is mine.”

Feel the stress ease somewhat? You should, because you’re making progress rather than staying stuck.

Also on the topic of goals, be sure to …

5. Create a few long-range goals

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Here’s where the fun starts. Until now you may have felt too fearful even to look at your finances, or too worn-down with paying bills to think beyond the next money issue. Now you get to blue-sky the rest of your life!

Specifically: What do you want out of that life? Travel? Entrepreneurship? Buying a house? Raising a family? Retiring early?

Once you’ve identified your goals, take action. Clean up your credit so you can get a great mortgage rate someday. Sign up for classes (or, better yet, free webinars) in your field of interest. Research the best travel hacks.

Most importantly, take a hard look at the spending habits you learned about in Tactic No. 1. Does your current behavior support your dream, or sandbag it?

Identifying the life you want will greatly reduce your money stress. You’ll no longer be on a financial treadmill: work, pay bills, work, pay bills. Instead, you’ll be taking steps to make your dream happen.

Keep in mind, however, that “I want to backpack around the world” shouldn’t come ahead of building an emergency fund or saving for retirement.

Note: Don’t set yourself up to fail by creating an unreasonable goal. “I’d like to pay off $80,000 in consumer debt in one year” probably isn’t going to work for most people. “I will look for a roommate and thus be able to put more money toward my debt repayment plan” is a lot more achievable.

All this is much easier if you …

6. Get an app for that!

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The more streamlined your money management, the less stressful your life will be. Tools like automatic and online bill payment avoid late fees. Direct deposit means you’ll never wait in another line with your paycheck.

Again, expense-tracking tools like PowerWallet make budgeting so, so easy. It’s a stress-reliever, too. If you start feeling panicky about your funds, call up PowerWallet and learn that, no, you didn’t overspend on meals out this month; in fact, you’ve spent 40 percent less in restaurants than you did last month. (Go you!)

And if you don’t use online bill pay, be sure to pay any bills promptly. As in, the day they arrive. Prevent paper clutter by scanning things you need to keep, and shredding everything else. Messy piles of bills and insurance paperwork is stressful. A clean desk is calming.

While looking for apps, you should also …

7. Seek answers to your questions /

Maybe it stresses you out to hear friends talking about ETFs and IRAs, because you haven’t got a clue what they mean. Don’t be ashamed: Lots of people grow up with little to no financial education, either at home or at school.

The internet makes money education easy. Money Talks News, for one, is filled with explanations of the best saving and spending tactics, along with more in-depth discussions on topics such as retirement and investing. Some recommendations:

Learn to use this phrase as needed: “That’s not in the budget right now.” This is not punishment, by the way, but a wise approach to using available funds.

Besides, the words “right now” leave the door open to eventual spending once you’ve zeroed out debts and made provisions for the future.

That’s not deprivation. It’s the fast track to a stress-free life.

What are you doing to de-stress and get your finances under control? Share with us in comments below or on our Facebook page.

Donna Freedman
Donna Freedman @DLFreedman
A former newspaper journalist, Donna Freedman has been a staff writer for MSN Money and Get Rich Slowly, and freelanced for a wide variety of online and print publications. She got a ... More

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